EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.1
This
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") dated effective as of March
27,
2006 (the "Effective Date") is made and entered into by and between Xxxxxxxxx
Xxxxxxxx, an individual (the "Executive") Xenomics, Inc., a company incorporated
under the laws of the state of Florida (the "Company").
WITNESSETH:
The
Company desires to employ the Executive, and the Executive wishes to accept
such
employment with the Company, upon the terms and conditions set forth in this
Agreement.
In
consideration of the mutual promises and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree
as
follows:
1.
Employment.
The
Company hereby agrees to employ Executive, and Executive hereby accepts such
employment and agrees to perform Executive's duties and responsibilities in
accordance with the terms and conditions hereinafter set forth.
1.1
Duties and Responsibilities.
Executive
shall serve as Chief Financial Officer of Company. During the Employment Term
(as defined below), Executive shall perform all duties and accept all
responsibilities incident to such position and other appropriate duties as
may
be assigned to Executive by the Chief Executive Officer and Company's Board
of
Directors ("Board") from time to time, including service as an officer,
director, employee or consultant to the Company's subsidiaries, affiliates
and
joint ventures. The Company shall retain full direction and control of the
manner, means and methods by which Executive performs the services for which
he
is employed hereunder. The Executive shall typically work four days per week.
However, it is acknowledged that the exact number of days the Executive will
work in any given week may vary significantly, but, over an extended period
of
time, will average four days per week. Except for vacation, personal or sick
days, or holidays, the Executive shall typically work during Company's normal
business hours which are 9:00 a.m. to 5:30 p.m. Monday to Friday.
1.2
Place
of Business.
Executive
acknowledges that the Company is headquartered in the Borough of Manhattan
of
the City of New York, New York with a laboratory located in Monmouth Junction,
New Jersey, and has a joint venture which is headquartered in Rome, Italy.
The
Executive will perform his principal duties and responsibilities in either
the
Company's New York or New Jersey locations at the Chief Executive Officer's
discretion and agrees to occasional travel to the joint venture's office in
Rome
and other domestic and international locations.
1.3
Employment Term.
The
term
of Executive's employment under this Agreement shall commence as of the
Effective Date and shall continue for one (1) year, unless earlier terminated
in
accordance with Section 4 hereof. The term of Executive's employment shall
be
automatically renewed for successive one (1) year periods until the Executive
or
the Company delivers to the other party a written notice of their intent not
to
renew the "Employment Term," (a "Non-Renewal Notice") such written notice to
be
delivered at least sixty (60) days prior to the expiration of the then-effective
"Employment Term" as that term is defined below. The period commencing as of
the
Effective Date and ending one (1) year thereafter or such later date (the
"Expiration Date") to which the term of Executive's employment under the
Agreement shall have been extended by mutual written agreement is referred
to
herein as the "Employment Term."
1.4
Extent of Service.
During
the Employment Term, Executive agrees to use Executive's best efforts to carry
out the duties and responsibilities under Section 1.1 hereof and, subject to
the
constraints described in Section 1.1, to devote substantially all Executive's
business time, attention and energy thereto. Executive further agrees not to
work either on a part-time or independent contracting basis for any other
business or enterprise during the Employment Term, except as Chief Financial
Officer for FermaVir Pharmaceuticals, Inc. or Callisto Pharmaceuticals, Inc.
on
a part-time basis, without the prior written consent of the Board, which consent
shall not be unreasonably withheld.
1.5
Base
Salary.
The
Company shall pay Executive a base salary (the "Base Salary") at the annual
rate
of $140,000 (U.S.), payable at such times as the Company customarily pays its
other senior level executives (but in any event no less often than monthly).
The
Base Salary shall be subject to all state, Federal, and local payroll tax
withholding and any other withholdings required by law. The Base Salary is
subject to periodic increases in accordance with Company's policies and/or
practices for senior level executives, but no less frequently than every twelve
(12) months.
1.6
Incentive Compensation.
In
addition to the Base Salary, Executive shall be eligible to earn a cash bonus
of
up to twenty percent (20%) of the Base Salary for the first twelve-month period
during the Employment Term ("Annual Bonus") at the discretion of the Board
or,
if the Board organizes a compensation committee, such committee (the
"Committee"). Within three (3) months after the Effective Date, the Board or
the
Committee shall agree upon goals required for Executive to earn the Annual
Bonus. Executive's bonus, if any, shall be subject to all applicable tax and
payroll withholdings. The amount of the Annual Bonus is not subject to
decreases, but is subject to periodic increases in accordance with Company's
policies and/or practices for senior level executives, but no less frequently
than every twelve (12) months.
1.7
Options.
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(a)
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Executive
shall be eligible to participate in the Xenomics 2004 Stock Option
Plan
(the "Plan"). The Board of Directors of Xenomics, Inc., will make
an
initial grant of options to the Executive as
follows:
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(i)
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The
number of initial option shares granted to Executive is 200,000 shares
of
Company's common stock.
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(ii)
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The
exercise price at which Executive can purchase initial option shares
is
equal to the closing price of the Company's common stock on the Effective
Date.
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(iii)
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The
option is exercisable only to the extent vested in accordance with
the
schedule set forth in paragraph 1.7(a)(iv), below, and the
Plan.
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(iv)
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Initial
option shares granted shall vest in accordance with the following
schedule:
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33 1/3% option shares shall vest on the first anniversary of the
Effective
Date;
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33 1/3% option shares shall vest on the second anniversary of the
Effective Date; and
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33 1/3% option shares shall vest on the third anniversary of the
Effective
Date.
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(v)
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The
option shall expire, and be of no further force or effect, on the
tenth
anniversary of the Effective Date or, earlier in the event of disability,
death or other termination of service as set forth in the
Plan.
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(b)
The
option agreement will contain a provision that in the event there shall have
been a Change in Control of the Company while the Executive is an employee
of
the Company and the Executive’s employment by the Company thereafter shall have
been terminated by the Company (the “Termination Date”) or by the Executive for
Good Reason, within two years of the date upon which the Change in Control
shall
have occurred, unless such termination is as a result of (i) the Executive’s
death; (ii) the Executive’s Disability; (iii) the Executive’s Retirement
(termination in accordance with the Company’s Retirement Plan applicable
to its
employees or in accordance with any other retirement arrangements which have
been entered into with the Executive) or (iv) the Executive’s termination for
Cause or Misconduct, all unvested stock options shall immediately and
irrevocably vest and the exercise period of such options shall be automatically
extended to the later of the longest period permitted by the Company’s stock
option plans or ten years following the Termination Date. For purposes of the
option agreement, a “Change in Control” shall be deemed to have occurred if (i)
there shall be consummated (A) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant
to
which shares of the Company’s Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company’s Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale, lease, exchange
or
other transfer (in one transaction or a series of related transactions) of
all
or substantially all the assets of the Company; or (ii) the stockholders of
the
Company shall approve any plan or proposal for the liquidation or dissolution
of
the Company, or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)), other
than the Company or any employee benefit plan sponsored by the Company, shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company representing 20% or more of the combined
voting power of the Company’s then outstanding securities ordinarily (and apart
from rights accruing in special circumstances) having the right to vote in
the
election of directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, or (iv) at any time
during a period of two consecutive years, individuals who at the beginning
of
such period constituted the Board of Directors of the Company shall cease for
any reason to constitute at least a majority thereof, unless the election or
the
nomination for election by the Company’s stockholders of each new director
during such two-year period was approved by a vote of at least two-thirds of
the
directors then still in office who were directors at the beginning of such
two-year period
1.8
Other
Benefits.
During
the Employment Term, Executive shall be entitled to health care coverage
(medical, dental, and hospitalization) for Executive and his family consistent
with the Company’s policy. In addition, Executive shall be entitled to
participate in all employee benefit plans and programs made available to the
Company's senior level executives as a group or to its employees generally,
as
such plans or programs may be in effect from time to time (the "Benefit
Coverages"), including, without limitation, short-term and long-term disability
and life insurance plans, accidental death and dismemberment protection and
travel accident insurance. Executive shall be provided office space and staff
assistance appropriate for Executive's position and adequate for the performance
of his duties and responsibilities. Executive shall be indemnified by the
Company to the fullest extent possible allowed under applicable state laws
and
be a named insured under the Company's Directors' and Officers' Liability
insurance program.
1.9
Reimbursement of Expenses; Vacation; Sick Days and Personal Days.
Executive
shall be provided with reimbursement of expenses related to Executive's
employment by the Company on a basis no less favorable than that which may
be
authorized from time to time by the Board, in its sole discretion, for senior
level executives as a group. Executive shall be entitled to vacation and
holidays in accordance with the Company's policies and/or practices for senior
level executives, but not less than (a) two (2) weeks of vacation per calendar
year until January 31, 2007 and (b) three (3) weeks of vacation per calendar
year thereafter, provided Executive shall not utilize more than ten (10)
consecutive business days without the express consent of the Chief Executive
Officer. Executive shall be entitled to no more than an aggregate of ten (10)
sick days and personal days per calendar year. Unused vacation time, sick and
personal days will be forfeited as of January 31 of the following calendar
year
of the Employment Term.
1.10
No
Other Compensation.
Except
as
expressly provided in Sections 1.4 through 1.9, and under Section 4 below,
Executive shall not be entitled to any other compensation or benefits for
services to the Company in any capacity and for services as an officer,
director, employee and consultant for Company's subsidiaries, affiliates and
joint ventures.
2.
Confidential Information.
Executive
recognizes and acknowledges that by reason of Executive's employment by and
service to the Company before, during and, if applicable, after the Employment
Term, Executive will have access to certain confidential and proprietary
information relating to the Company's business, which may include, but is not
limited to, trade secrets, trade "know-how," product development techniques
and
plans, formulas, customer lists and addresses, financing services, funding
programs, cost and pricing information, marketing and sales techniques, strategy
and programs, computer programs and software and financial information
(collectively referred to herein as "Confidential Information"). Executive
acknowledges that such Confidential Information is a valuable and unique asset
of the Company and Executive covenants that he will not, unless expressly
authorized in writing by the Company, at any time during the course of
Executive's employment use any Confidential Information or divulge or disclose
any Confidential Information to any person, firm or corporation except in
connection with the performance of Executive's duties for and on behalf of
the
Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, he will not use any
Confidential Information or divulge or disclose any Confidential Information
to
any person, firm or corporation, unless such information is in the public domain
through no fault of Executive or except in connection with any arbitration
or
litigation between the Company and the Executive, when required to do so by
law
or governmental regulation pursuant to subpoena or by a court of law, by any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order Executive to divulge, disclose
or
make accessible such information. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Company, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for and on behalf of the Company and in a
manner consistent with the Company's policies regarding Confidential
Information. Upon termination of Executive's employment, the Executive agrees
to
immediately return to the Company all written Confidential Information
(including, without limitation, in any computer or other electronic format)
in
Executive's possession.
3.
Non-Competition; Non-Solicitation.
3.1
Non-Compete.
The
Executive hereby covenants and agrees that during the term of this Agreement
and, in the event of (a) Voluntary Termination (as defined below), or (b)
termination by Company for Cause (as defined below) or Misconduct (as defined
below), or (c) the expiration of the Employment Term as a result of Executive
giving Company a Non-Renewal Notice for a period of one year following the
end
of the Employment Term, the Executive will not, without the prior written
consent of the Company, directly or indirectly, on his own behalf or in the
service or on behalf of others, whether or not for compensation, engage in
any
business activity, or have any interest in any person, firm, corporation or
business, through a subsidiary or parent entity or other entity (whether as
a
shareholder, agent, joint venturer, security holder, trustee, partner,
consultant, creditor lending credit or money for the purpose of establishing
or
operating any such business, partner or otherwise) with any Competing Business
in the Covered Area.
For
the
purpose of this Section 3.1, (i) "Competing Business" means any medical or
health care company, any contract manufacturer, any research laboratory or
other
company or entity (whether or not organized for profit) has, or is seeking
to
develop, one or more products or therapies that is related to genetic testing
through the use of urine specimens and (ii) "Covered Area" means all
geographical areas of the United States, Italy and other foreign jurisdictions
where Company then has offices and/or sells its products directly or indirectly
through distributors and/or other sales agents. Notwithstanding the foregoing,
the Executive may own shares of companies whose securities are publicly traded,
so long as ownership of such securities do not constitute more than one percent
(1%) of the outstanding securities of any such company.
3.2
Non-Solicitation.
The
Executive further agrees that as long as the Agreement remains in effect and,
in
the event of (a) Voluntary Termination, or (b) termination by Company for Cause,
Misconduct or as a result of a Non-Renewal Notice given by the Company or
Executive for a period of one (1) year from its termination, the Executive
will
not divert any business of the Company and/or its affiliates or any customers
or
suppliers of the Company and/or the Company's and/or its affiliates' business
to
any other person, entity or competitor, or induce or attempt to induce, directly
or indirectly, any person to leave his or her employment with the Company and/or
its affiliates.
3.3
Remedies.
The
Executive acknowledges and agrees that his obligations provided herein are
necessary and reasonable in order to protect the Company and its affiliates
and
their respective business and the Executive expressly agrees that monetary
damages would be inadequate to compensate the Company and/or its affiliates
for
any breach by the Executive of his covenants and agreements set forth herein.
Accordingly, the Executive agrees and acknowledges that any such violation
or
threatened violation of this Section 3 will cause irreparable injury to the
Company and that, in addition to any other remedies that may be available,
in
law, in equity or otherwise, the Company and its affiliates shall be entitled
to
obtain injunctive relief against the threatened breach of this Section 3 or
the
continuation of any such breach by the Executive without the necessity of
proving actual damages.
4.
Termination.
4.1
By
Company.
The
Company, acting by duly adopted resolutions of the Board, may, in its discretion
and at its option, terminate the Executive's employment with or without Cause
or
Misconduct, and without prejudice to any other right or remedy to which the
Company or Executive may be entitled at law or in equity or under this
Agreement. In the event the Company desires to terminate the Executive's
employment without Cause or Misconduct, the duly adopted resolutions of the
Board and the Company shall give the Executive not less than sixty (60) days
advance written notice of such termination. Termination of Executive's
employment hereunder shall be deemed to be "for Cause" in the event that
Executive violates his duties under any provisions of this Agreement after
there
has been delivered to Executive a written demand for performance from the
Company which describes the basis for the Company's belief that Executive has
not substantially performed his duties. Termination of Executive's employment
hereunder shall be deemed to be "for Misconduct", if Executive is found to
be in
material breach of the provisions of Sections 2 or 3 of this Agreement, is
guilty of any felony or an act of fraud or embezzlement, is guilty of willful
misconduct or gross neglect, misappropriation, concealment or conversion of
any
money or property of the Company, or reckless conduct which endangers the safety
of other persons or property during the course of employment or while on
premises leased or owned by the Company.
4.2
Good
Reason.
For
purposes of this Agreement "Good Reason" shall mean any of the following events
unless it occurs with the Executive’s express prior written
consent:
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(i)
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The
assignment to Executive of any duties or the significant reduction
of
Executive's duties, either of which is materially inconsistent with
Executive's position with the Company and responsibilities in effect
immediately prior to such assignment, or the removal of Executive
from
such position and responsibilities;
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(ii)
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A
material reduction by the Company in the compensation of Executive,
without the Executive's written consent, as in effect immediately
prior to
such reduction;
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(iii)
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A
material reduction by the Company in the kind or level of benefits
to
which Executive is entitled immediately prior to such reduction with
the
result that Executive's overall benefits package is significantly
reduced;
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(iv)
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Change
where the Executive is expected to perform his principal duties as
defined
in Section 1.2 to a location more than fifty-five (55) miles from
or
beyond a normal commutation from the Executive's present
residence.
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(v)
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Any
termination of Executive by the Company which is not effected for
Misconduct, Cause or as a result of a Non Renewal Notice given by
the
Company or Executive, or any purported termination for Misconduct
or Cause
for which the grounds relied upon are determined by a court of competent
jurisdiction not to be valid, unless Executive, following such purported
termination, receives all compensation, including vesting of all
unvested
stock options and restricted stock within five business days of such
determination;
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(vi)
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Company's
violation of any material provision of this agreement, unless the
grounds
relied upon are determined by a court of competent jurisdiction not
to be
valid.
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The
Executive may terminate his or her employment for Good Reason during the term
of
this Agreement and become entitled to the compensation provided in Section
4.5(c). Termination by the Executive pursuant to this Section shall be
communicated in writing to the Company and the Company's Board of Directors
specifying the facts and circumstances serving as the basis for such
termination.
4.3
By
Executive's Death or Disability.
This
Agreement shall also be terminated upon the Executive's death and/or a finding
of permanent physical or mental disability, such disability expected to result
in death or to be of a continuous duration of no less than three (3) months,
and
the Executive is unable to perform his usual and essential duties for the
Company.
4.4
Voluntary Termination.
Executive
may voluntarily terminate the Employment Term upon sixty (60) days' prior
written notice for any reason; provided, however, that no further payments
shall
be due under this Agreement in that event except that Executive shall be
entitled to any benefits due under any compensation or benefit plan provided
by
the Company for executives or otherwise outside of this Agreement.
4.5
Compensation on Termination.
(a)
Cause
or Misconduct.
In
the
event the Company terminates Executive for Cause or Misconduct, Executive shall
not be entitled to any compensation other than Base Salary accrued through
the
date of termination. Such termination shall also immediately cease the vesting
of all outstanding unvested options and restricted stock held on the date of
termination and all such unvested options shall thereupon expire.
(b)
Voluntary Termination.
In
the
event Executive resigns from the Company voluntarily, Executive shall not be
entitled to any compensation other than Base Salary accrued through the
effective date of his resignation.
(c)
Good
Reason.
In
the
event Executive’s employment is terminated by the Executive pursuant to Section
4.2, the Company shall pay to Executive within fifteen (15) days after such
termination:
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(i)
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Accrued
Base Salary as of the date of
termination;
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(ii)
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Reimbursement
of business related expenses;
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(iii)
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Executive's
Base Salary for ninety (90) calendar days from the date of termination;
and
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(iv)
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A
pro rata portion of any Annual Bonus to which Executive would otherwise
be
entitled for the year of
termination.
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(v)
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For
a period of three (3) months after termination, the Company shall
continue
to make available to Executive and to pay, consistent with the Company’s
policy, for all health, dental, vision, life, dependent life, long-term
disability, accidental death and dismemberment and other similar
insurance
plans existing on the date of Executive's
termination
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(d)
Death
or Disability.
In
the
event of termination by reason of Executive's death and/or permanent disability,
Executive or his executors, legal representatives or administrators, as
applicable, shall be entitled to an amount equal to Executive's Base Salary
accrued through the date of termination, plus a pro rata share of any annual
bonus to which Executive would otherwise be entitled for the year during which
death or permanent disability occurs.
5.
General Provisions.
5.1
Modification; No Waiver.
No
modification, amendment or discharge of this Agreement shall be valid unless
the
same is in writing and signed by all parties hereto. Failure of any party at
any
time to enforce any provisions of this Agreement or any rights or to exercise
any elections shall in no way be considered to be a waiver of such provisions,
rights or elections and shall in no way affect the validity of this Agreement.
The exercise by any party of any of its rights or any of its elections under
this Agreement shall not preclude or prejudice such party from exercising the
same or any other right it may have under this Agreement irrespective of any
previous action taken.
5.2
Notices.
All
notices and other communications required or permitted hereunder or necessary
or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand delivered or mailed by registered or certified mail
as
follows (provided that notice of change of address shall be deemed given only
when received):
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If
to the Company, to:
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Xenomics,
Inc.
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000
Xxxxxxxxx Xxxxxx - Xxxxx 0000
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Xxx
Xxxx, XX 00000
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Attention:
Chief Executive Officer
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With
a required copy to:
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Xxxxxxx
Xxxxxxx
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
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0000
Xxxxxx xx xxx Xxxxxxxx
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Xxx
Xxxx, XX 00000
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If
to Executive, to:
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Xxxxxxxxx
Xxxxxxxx
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000
Xxxx Xxxx Xxxx
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Xxxxx
Xxxx, XX 00000
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With
a required copy to:
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Xxxxxxx
Xxxxxx
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Xxxxxxx
Xxxx Xxxxxx & Xxxxxxx LLP
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1114
Avenue of the Americas - 46th Floor
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New
York, NY 10036-7798
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Or
to
such other names or addresses as the Company or Executive, as the case may
be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
5.3
Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
5.4
Further Assurances.
Each
party to this Agreement shall execute all instruments and documents and take
all
actions as may be reasonably required to effectuate this Agreement.
5.5
Severability.
Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
then such illegal or unenforceable provision shall be modified by the proper
court or arbitrator to the extent necessary and possible to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provisions or portion thereof
determined to be illegal or unenforceable and shall not be affected
thereby.
5.6
Successors and Assigns.
Executive
may not assign this Agreement without the prior written consent of the Company.
The Company may assign its rights without the written consent of Executive,
so
long as the Company or its assignee complies with the other material terms
of
this Agreement. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the Company, and the Executive's rights under this Agreement shall
inure to the benefit of and be binding upon his heirs and executors. The
Company's subsidiaries and controlled affiliates shall be express third party
beneficiaries of this Agreement.
5.7
Entire Agreement.
This
Agreement supersedes all prior agreements and understandings between the
parties, oral or written. No modification, termination or attempted waiver
shall
be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.
5.8
Counterparts; Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
for
all purposes be deemed to be an original, and all of which taken together shall
constitute one and the same instrument. This Agreement may be executed by
facsimile with original signatures to follow.
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first written above.
| "COMPANY:" | Xenomics, Inc. | |
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| /s/ L. Xxxxx Xxxxx | ||
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| Name: L.
Xxxxx Xxxxx
Title: Chief
Executive Officer
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| "EXECUTIVE:" | ||
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| /s/ Xxxxxxxxx Xxxxxxxx | ||
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| Xxxxxxxxx Xxxxxxxx | ||
